On the complexity of strategy-switching dynamics

A new approach has been proposed to analyze the strategy-switching dynamics in a discrete model or a non-cooperative game with the following characteristics: (i) the agents are motivated by absolute payoffs rather than relative ones; (ii) the payoffs vary as the composition of the population changes; (iii) the agents are boundedly rational in the sense that they can only predict the outcomes of their own actions. Rich dynamic phenomena are exhibited for such discrete dynamic models or games. The approach is then applied to explore the relative-profitability of price-taking behavior in a quantity-competing heterogeneous oligopoly.